Banks ‘shying away from risky consumers’

Banking groups in the UK are increasingly shying away from what they deem to be risky borrowers, according to reports.

With so-called bad debt hitting the profits of some of the foremost banks in the country, these organisations are tending to be more reluctant to lend money to individuals with poor credit ratings, the Daily Mail suggests.

Barclaycard is among the groups looking to “crackdown” on potential risks to its capacity to lend money profitably, as part of what the newspaper claims to be a “general squeeze on the availability of high street credit”.

A spokesperson for Barclays is quoted as saying: “We have been going through a review since 2006 and lowered credit limits for 500,000 cardholders where customers are over their limits or where they have become over extended.”

Meanwhile, many borrowers in the UK are facing further debt management pressures as a result of five increases in the base rate of interest since August of last year.